Are you a reactive or passive technical trader?
Whether you are a reactive or passive technical trader can greatly influence your trading success.
A reactive technical trader typically buys or sells retracements in price and breakouts, and take trades off support and resistance.
A passive technical trader will not engage in those setups at the hard right edge of a chart. Rather, they will watch and wait for price to unfold, and observe the common trading patterns as they do.
By doing so, the passive trader gains much more knowledge about the underlying price movement, and this provides them with a psychological edge over the reactive trader.
How so? Well, as humans we hate to lose! Especially when money is involved. What I’ve observed over the years is that there is something about the way price moves which focuses our attention and makes us take action. And that action can and does often lead to financial loss.
Price movement can drag reactive traders into trading positions. Let me ask you this: have you ever entered the market after price has retraced back to a great entry location, perhaps bouncing perfectly off the 61.8% Fibonacci level (a common retracement entry tool), only to watch it go your way momentarily and then BANG - the price reverses hard against you and you are losing a lot of money fast?
Maybe you have taken a breakout trade where price had made a new low and the market was moving really quickly, and you were certain it would break to lower lows.
When the price did break lower you entered the market, fully believing that the market would continue. But no sooner did you enter the trade, the market turned and reversed hard against you!
This happens all the time, especially if you are a retail trader, because retail traders tend to be very technically driven. They do not really pay much attention to other forms of analysis, like economic fundamentals etc.
Because of this, they struggle to make consistent profits, as price pattern after price pattern fails to produce the results all the books and so called experts had claimed.
What we do is we sit and wait for reactive traders to make these common mistakes. Then I look to take advantage of these failures in price structures once they occur.
Essentially, we watch several trading patterns commonly used by reactive technical traders to extract consistent trading profits from the markets day after day for myself and my students.
The Trapped Traders™ concept is so named because the term 'trapped' is effectively what happens to reactive traders to who get caught on the wrong side of the market. Traders will remain in the losing trade, unable to exit in fear of crystallising the loss.
Remember I said humans hate to lose? For the savvy Trapped Trading protagonist, this creates a great opportunity. If we know many retail traders trade in a reactive fashion, and that humans hate losing, we can understand with perfect clarity where these groups of traders will liquidate their positions.
This provides us with a trade entry which could move the market in our desired direction.
These little known pockets of trading volume are not widely understood anywhere. With this information you will be able to take advantage of predictable losing human behavioural patterns which repeat.
This provides you with an evergreen approach to the financial markets which has never been described until now.
Join me at the webinar and take your trading and investing to a new level. Register here: https://attendee.gotowebinar.com/register/1530333637656359682